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Leodhasach

Factory Gate Prices Climb 0.7%

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Er, what? Please enlighten us as the logic behind a rate cut being odds on. Particularly given the recent inflation data, factory gate prices, and strengthening dollar. I think we are where we are for the next 3-4 months and then who knows which way.

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Er, what? Please enlighten us as the logic behind a rate cut being odds on. Particularly given the recent inflation data, factory gate prices, and strengthening dollar. I think we are where we are for the next 3-4 months and then who knows which way.

The MPC do not have to do anything until inflation rises above 3% and even then only send a letter to GB. They will hold or cut interest rates next, I think that's clear. The more bad news about retail etc that comes out the more certain this is.

Edited by BoredTrainBuilder

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Nonsense. The MPC do not just ignore the risk of inflation rising to 3%, they have a soft target of 2% and they try to manage to hit that two years out. Ignoring a current inflation of, say, 2.7-2.9% and then cutting rates would risk inflation shooting ouf of control.

Quite why you think a rate cut is clear is puzzling - Btw, have you seen this today in the Times indicating that rate cut hopes have been hit by improved retail numbers http://business.timesonline.co.uk/article/...1819942,00.html

I would tend to agree with you on a hold but only because that is likely to be potentially the least bad move for them. However, much like the markets, I think nothing is clear right now.

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I'd like nothing more than rates to go up to over 10%, however the press have in the last few months changed their tune and are expecting rate cuts any time soon. They're usually right. The soaring cost of living seen in the last 5 years hasn't shown up at all in our inflation measure, hence the whole charade carries on. I'm afraid rates are heading down next because they'll use the slower consumer spending on the high street as the excuse, even though everyones just spending on the internet and at Tesco instead.

Edited by simon99

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I'm afraid rates are heading down next

After the MPC voted _UNANIMOUSLY_ for a hold last month?

To get a rate cut you'd need all four of Gordon's cronies to vote to cut and one of the BoE members. If even Gordon's cronies were voting to hold, that's not exactly likely any time soon...

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Lets hope your right, but the BoE have voted unamimously before the last cut too.

I`m kinda with Simon on this, you read the facts on the BoE website and you realise that they should be absolutely obsessed with stamping down on inflation. However, I think what Simon is suggesting is that evidence of their independence is still up in the air. Economically the correct thing to do is to up rates, maybe by as much as one percent over the next twelve months, politically it would be suicide for some.

Edited by Converted Lurker

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Economically the correct thing to do is to up rates, maybe by as much as one percent over the next tweleve months

Economically the correct rate of interest would be far more than 5.5%. I'd say more like 8%.

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  • 341 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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